June 19, 2009

What the BTS Management Blog is: A place for thoughtful discussions and debates about our industry, our health and our future from 30,000 feet.

What the BTS Management Blog is not: A place for rants and personal attacks that focus on the small, insignificant issues from the runway level.

Rich Boggs
CEO & Chief CheerleaderEducated (many will question this) at Georgia Tech and armed with an MBA from UNC Chapel Hill, Rich began his career with ten frustrating years in the corporate world. In ‘76 (1976, not 1876) he discovered his passion for fitness and the club industry. The rest is ancient history. As the Chief Cheerleader of Body Training Systems, Rich spends his days “working on important deals” (translation: surfing the Internet) and encouraging the rest of the BTS team. Rich is an avid Power, Ride, Centergy and Active participant. Married for 44 years to his college sweetheart, Libby, they make their home in Atlanta and have three adult children – a son in San Francisco, a daughter in New York and a daughter in Atlanta – and two grandsons, Charlie and Henry and one granddaughter, Sophie.

July 6, 2009

32 years ago I got into the fitness industry in racquetball thinking that was the Holy Grail to health and fitness. Over these 32 years, my personal journey has caused the Holy Grail to take many different forms starting with racquetball, Augie’s Lifecycle, aerobics, our company’s The Original Step, Johnny G ‘s Spinning, Life Fitness, Techno Gym and thousands of other products and ideas that have come and gone. It has only been in the past five or six years that BTS has begun to question this very illusive and difficult Holy Grail since the net result of all these great products and ideas has been an ever increasing population that is less active and more overweight/obese.

BTS thinks the time has come to realize that the emperor may be scantily clad. IHRSA continues to trumpet the amazing number of members and success of our industry. At the end of 2007 we had 29,636 clubs and 41.5 million members. In 2004 we had 23,497 clubs and 41.3 million members. Penetration of club members as a percentage of the total population remains around 15%. THIS LEAVES AN AMAZING 85% WHO ARE NOT MEMBERS. Are the things that we have been doing for the past 30 years really not the answer? Could the industry’s model of selling thousands of memberships and having unqualified, low paid personnel attempting to service, keep the facility clean and open, just may not be the answer?

As much as we in the industry laughed at Curves, which was not equipment driven or sales driven, they certainly have a part of the answer as they attracted millions of women to a non-threatening, social atmosphere. Now there is Anytime Fitness and Planet Fitness who have great concepts that make lots of money for their owners and today many club operators are evaluating converting to this model. But does price with limited service deliver a real solution to their members? The answer will be found in the future by analyzing the total number of health club members, the REAL attrition rate and the percentage of overweight and obese population.

While BTS does not feel that we have found the Holy Grail, we think we know what the end result looks like. A business model that delivers an outcome for its customers, which is reflected in a very high usage rate/member and a significantly reduced attrition rate measured accurately. The stakeholders or employees are trained, motivated and compensated, so employee turnover is at a minimum. Finally, the owner derives a consistent, above average return and continues to reinvest in the physical plant and the employees and is not threatened by the “flavor of the month” new club concept. We firmly believe this is the future of the club industry and would like to invite club owners with a similar mission to join us.

We have two very simple products that we have seen repeatedly accomplish what is needed to fulfill the above mission.

1. The key to member retention is helping them to find a physical activity that is designed to facilitate social interaction, which becomes the “sticky web” to keep people coming back and becoming more active. We have found this to be true with our seven programs, which are professionally constructed for the psychological and physiological outcome of a safe, fun and effective activity.
2. Clubs by design need to have a relatively large member base i.e. several thousand members in order to make the investment work. The challenge has been how to service the needs of those members who have not found their “sticky web” activity which may change daily or weekly. For the past two years, we have been involved with a company from the UK that has developed software that ACCURATELY identifies which members are at high risk of dropout and adjusts that risk daily based upon a complex, but proven formula, that has been tested on over 2 million member records.

We do not have all the answers but we feel our direction and mission is correct, BUT we need help. We need competent club owners with a similar vision of what this industry should look like and together we will continue to learn how to deliver, not what we want, but what our customers want and need. If this appeals to you, whether you’re an owner or work in our industry, please join this blog. Give us your feedback, your thoughts and your ideas so we may begin to change for the better. Change that delivers results to customers, pride and financial rewards to those professionals who work in the industry and consistent returns to the owners and investors who make this possible.

“Life is way too short to be mediocre! Defending mediocrity is exhausting.” BTS wants to be great but greatness can only happen by working with great customers with similar goals and philosophies.